4 ways to convince Millennial workers to stick around

Dear Annie: I’m in charge of a product development team at a Fortune 500 company, and right now the division head and I are setting a couple of big goals for 2015, especially regarding products we want to roll out by mid-year. I think our deadlines for different phases of these projects are realistic, but our ability to meet them depends partly on keeping the same people we have now, because having to bring replacement hires up to speed would really slow us down.

The main thing that worries me is that, out of the 22 people who report to me, 12 are in their mid-twenties to early thirties. Our whole company has had a problem recently with high turnover in this age group. Do you have any suggestions about how to hold on to them, at least for the next few months? — Fingers Crossed

Dear F.C.: It’s true, Millennials are quicker to jump ship than any other generation of employees, especially Baby Boomers. One new study from Payscale.com, for instance, says that more than 40% of Boomers think people should stay in one job, or at least one company, for at least five years. A scant 13% of Millennials agree.

There’s also lots of evidence that young workers hold much different expectations about work than their elders ever did. So bosses intent on keeping them around may have to make some specific changes in the way they lead their teams. “Millennials want more openness and transparency,” observes Kris Duggan, CEO of BetterWorks, which makes a software platform aimed at helping businesses reach goals. “They also need more encouragement, and more of a sense that they’re making progress, than most managers are used to giving people.”

Both as a co-founder of gamification company Badgeville and from working with BetterWorks clients now, Duggan has seen close up what works, and doesn’t, in inspiring twenty-something talent to stay put. He recommends these four steps:

Make goals clear, both theirs and yours. “Millennials crave structure and guidance, so set clear expectations,” Duggan says. At the same time, explain what your own goals are — meeting each of those demanding deadlines, for instance — and why they matter, not just to your team but to the division and the whole company.

“Often, managers just assign tasks without explanation, so people don’t see what their bosses are trying to accomplish,” notes Duggan. “But it’s important to Millennials that you connect those dots. They want to see the big picture.”

Get out of their way. Once you’ve explained exactly what has to get done, Duggan says, “step back and let them figure out how to do it. You really shift from being a manager to acting as more of a coach, and encourage them to figure out the details.” Millennials tend to rebel against micromanagement (even more than most other people), he adds, so avoid it. Your role is to help — in setting small interim goals and deadlines that lead up to larger ones, for example — without hovering.

Give lots of positive feedback. Much has been made of Millennials’ upbringing as the overpraised generation, where everybody wins a trophy just for showing up. But, according to Duggan, applauding progress and celebrating milestones at work is not about that supposed sense of entitlement. Rather, he points to research showing that people who use a pedometer or FitBit to measure how much they walk each day take 30% more steps than people who don’t.

That’s not a coincidence. “Knowing how you’re doing, and having your progress acknowledged, is immensely motivating,” he says, and the more frequently, the better. “Annual performance reviews do not work with Millennials,” he adds. “They look for feedback and direction every week or two.”

Show them a career path. Despite what often looks like a disjointed series of short-term moves, Millennials are “intensely focused on the long term. They want to see how their current job fits into their whole career plan,” Duggan says. “By having open conversations about how to be successful at different levels throughout the company, and what it takes to be promoted, you can take something very abstract and make it real.” Talking about the future might also give Gen Yers a reason to look for their next job in-house, instead of somewhere else.

Any team leader who wants to create a Millennial-friendly culture can do it, Duggan says, and January “is a great opportunity to start being more open and collaborative — new year, new goals, new transparency.” Good luck.

Talkback: If you’re a Millennial, what would entice you to stay with your current employer? Leave a comment below.

The ‘new normal’ in how you get paid

First, here’s the good news: U.S. companies’ salary budgets are growing, up an average of about 3% for 2014, so everyone has a shot at a slightly better raise this year and next than they did in 2013.

That’s nice, of course, but not everyone will have cause to celebrate. Instead of being doled out more or less evenly across the board, as they used to be, salary hikes at most companies will be all over the map, according to a report from human resources association WordlatWork, based on a detailed survey of 5,252 HR managers at companies with a total of 13 million employees.

“Low performers”—those who simply show up and do the bare minimum—may get no raise at all, the study says, average employees will see a 2.7% increase, and stars will get a bump of 4% or more.

“We’re seeing a much greater emphasis on performance-based pay,” notes Alison Avalos, WorldAtWork’s research chief. “Partly because companies learned what it takes to sustain their businesses in the hard times of the recession, when they do spend money now, they want more bang for the buck.”

That means most employers are giving out more, and often bigger, bonuses than they used to. More than half (60%) now pay “spot” bonuses for excellent performance, for instance. Of those, the study says, almost one-third (31%) reward stellar middle managers with $5,000 or more, while 27% typically pay between $2,500 and $5,000.

In a sign that the job market is heating up, more companies are also using bonuses to attract and keep top talent. Almost two-thirds (74%) now sweeten the pot for new hires, a record high in the 41 years WorldAtWork has done its annual study. About 51% of employers now use retention bonuses to entice their stars to stick around, more than double the 25% who did in 2010.

Bonus programs aren’t new, of course, but their sudden increase in popularity is. “Relatively small average raises, with more kinds of bonuses available, is the new normal,” Avalos observes, in large part because a one-time bonus payout doesn’t get baked into overhead the way a salary hike does. “From the companies’ point of view, it’s a very conservative approach.”

For individual employees, Avalos points out that the rise of variable pay is a mixed blessing. “It puts more pressure on the employee to exceed expectations,” she says. “But the chance to earn a bonus, or bigger-than-average raise, offers more opportunity, too.”

Most employed job seekers want to change careers

As the economy keeps generating jobs (even if many aren’t full-time or high-paying), people who stayed put during the recession are more confident that they can move on to greener pastures. That’s not surprising, but here’s what is: 86% of job seekers who are already employed are looking for work outside their current occupations.

“People are going after really different kinds of jobs, often totally different from the work they’re doing now,” notes Tara Sinclair, economist at job site Indeed.com’s research arm, Indeed Hiring Lab. She and her team analyzed the job hunting activity of more than 430,000 people in Indeed.com’s database.

“We expect to see that, as the economy improves, more job hunters will try to move into something that’s closer to their ‘dream job,’” she says. “They’re exploring really different kinds of careers.”

About 60% of those Sinclair studied are looking outside their current occupation without considering jobs in their current fields at all. Some will move if they have to. About 28% of employed job hunters are actively trying to find work in a different state, according to a separate Indeed.com study. Just over one-quarter may not sound like a lot, but it’s more than twice as many compared to what it was in 2012 and 2013, when what economists call “realized mobility”—people moving to take jobs—stood at a post-World-War-Two low of just 12%.

So, what can employers do to hold on to key employees who might be getting restless? A raise or a bonus might help.

“As a rule, our research showed that people who are already in highly paid occupations want to stay in their current fields,” Sinclair says—but they care a lot about pay. “Money isn’t usually what attracts people to a job, according to our findings, but it can be very useful for retention.”

Indeed’s research also shows that employers who aren’t offering flexible work schedules may want to consider it. “Highly skilled employees, such as in tech and mathematics, are especially interested in flexibility,” Sinclair says. “Even those who are employed full-time right now are searching our site for part-time jobs, and for companies that allow flexible arrangements like job-sharing.”

Companies big enough to have operations in several places around the country, or the world, might also think about offering star employees the chance to move. “Mobility within the same organization, either to a different functional area or a different location or both, could be a real win-win,” notes Sinclair.

According to Indeed’s study, Texas is attracting the most out-of-state job applicants, with California and Florida close behind. The three places most job seekers are looking to leave: Washington, D.C., Wyoming, and West Virginia.